CHAIR AND MEMBERS CORPORATE SERVICES COMMITTEE MEETING ON MAY 25, 2016

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1 TO: CHAIR AND MEMBERS CORPORATE SERVICES COMMITTEE MEETING ON MAY 25, 2016 FROM: MARTIN HAYWARD MANAGING DIRECTOR, CORPORATE SERVICES AND CITY TREASURER, CHIEF FINANCIAL OFFICER SUBJECT: INDUSTRIAL LAND DEVELOPMENT STRATEGY ANNUAL MONITORING AND PRICING REPORT CITY OF LONDON RECOMMENDATION That, on the recommendation of the Managing Director, Corporate Services and City Treasurer, Chief Financial Officer, on the advice of the Manager of Realty Services, the following actions be taken with respect to the annual monitoring and pricing of City-owned industrial lands: a) THE FOLLOWING ACTION BE TAKEN to adjust the current pricing of City-owned industrial land from the following prices that were established April 1, 2014: Pricing for serviced industrial land in Innovation Park, Skyway Industrial Park, River Road Industrial Park, and Cuddy Blvd Parcels: Lots up to 3.99 acres $75, per acre 4.00 acres and up $65, per acre Pricing for serviced industrial land in Trafalgar Industrial Park: All lot sizes - $55, per acre. b) The 2016 Annual Monitoring and Pricing Report related the Industrial Land Development Strategy (ILDS) BE RECEIVED for information. PREVIOUS REPORTS PERTINENT TO THIS MATTER Board of Control Report February 11, 2009 Industrial Land Development Strategy Report Strategic Priorities and Policy Committee November 18, 2013 Industrial Land Development Strategy Strategic Priorities and Policy Committee March 9, 2015 Industrial Land Development Strategy Annual Monitoring & Pricing Report Purpose BACKGROUND The purpose of this report is to provide information to Municipal Council relative to the City s Industrial Land Development Activity and review the current pricing and policy for City owned Industrial land. Context This report is prepared in accordance with Municipal Council s resolution which directs that the Civic Administration prepare a monitoring report on the City s Industrial Land Development Strategy (ILDS), as well as a review of the pricing of City owned industrial land for Municipal Council s consideration.

2 The City of London owns seven major industrial land holdings. Land for three of the most recent industrial parks was acquired in direct response to the Industrial Land Development Strategy and these three City owned industrial parks have been fully developed since Council endorsed the strategy in November of In the Strategic Plan for the City of London and the Economic Roadmap, ILDS remains an important strategy in growing our economy and bringing more employment to the City. City Owned Industrial Land Pricing in London, Ontario The current pricing levels of all City owned industrial parks, established effective April 1, 2014, is as follows: Price for serviced industrial land in Innovation Park, Phases 1 & 2 and all other City owned Industrial Parks: Lots up to 3.99 acres $75, per acre 4.00 acres and up $65, per acre Pricing for serviced industrial land in Innovation Park, Phases 3 and 4: All lot sizes $ 75, per acre Surcharges to be added as follows: Highway 401 Exposure 15%; Veteran s Memorial Parkway Exposure 5%; and The cost of service connections from the main to the property line being the responsibility of the purchaser. Industrial lots are sold on a where is, as is basis, with grading, stripping and removal of excess topsoil being the purchaser s responsibility and cost. The City will strive to provide grading of the municipal industrial parks on a level-graded basis. Site specific final grading is the responsibility of a purchaser. Effective June 1, 2016, pricing for serviced industrial land in Innovation Park, Skyway Industrial Park, River Road Industrial Park, and Cuddy Blvd Parcels will be: Lots up to 3.99 acres $75, per acre 4.00 acres and up $65, per acre Pricing for serviced industrial land in Trafalgar Industrial Park will be: All lot sizes - $55, per acre. The pricing for industrial lots in Trafalgar Industrial Park is slightly lower due to the age of the industrial park, the reduced road frontage for each parcel, the adjacent residential land uses, the requirement for a noise study prior to development, and limited demand. Surcharges will remain as follows: Highway 401 Exposure 15%; Veteran s Memorial Parkway Exposure 5%; and Also, the cost of service connections from the main to the property line being the responsibility of the purchaser. Industrial lots are sold on a where is, as is basis, with grading, stripping and removal of excess topsoil being the purchaser s responsibility and cost. The City will strive to provide grading of the municipal industrial parks on a level-graded basis. Site specific final grading is the responsibility of a purchaser. 2.

3 Industrial Land Pricing in Surrounding Municipalities in Southwestern Ontario The chart attached to this report as Table 1 is a survey of the price levels of industrial land in surrounding municipalities in Southwestern Ontario. Examples of surrounding municipally owned industrial land prices as of April, 2016 are: Municipality Price Per Acre DC Charges Applicable Shovel Ready Parcel * Brantford $75,000 - $125,000 Yes Yes Cambridge $285,000 Yes Yes Chatham/Kent $50,000 No Yes County of Brant $75,000 Yes Yes Guelph $300, ,000 Yes Yes Hamilton $205,000 Yes Yes Ingersoll $100,000 Yes Yes Kitchener $250,000 Yes Yes Sarnia/Lambton $55,000 Yes Yes St. Thomas $35,000 No Yes Stratford $75,000 No Yes Strathroy $35,000 Yes Yes Thames Centre $50,000 Yes Yes Windsor $65,000 No Yes Woodstock $70,000 No Yes shovel ready describes construction projects where planning and engineering is advanced enough that, given sufficient funding, construction can begin within a very short time. Industrial Land Sales in the Private Sector Private sector industrial land sales remained low in 2014 and 2015, partly due to the higher pricing of land than City-owned lands. In general, pricing can be $20,000 to $30,000 per acre higher. It should be noted that the only privately-held industrial land sale in 2015 was a 7 acre parcel sold to Middlesex County for the purpose of a new EMS station Privately-Owned Industrial Land Sales Acres Year SUMMARY OF CURRENT LAND HOLDINGS A brief summary of the seven major City owned Industrial Parks is outlined on the following pages: 3.

4 SERVICED LANDS Current Inventory Serviced Industrial Land City serviced industrial lands have access to full municipal servicing to the lot line, and in most cases, are shovel ready, being available for a client to purchase and develop. PARK Net Available (Acres) Net Available (Hectares) Innovation Park Phases I to IV Skyway Industrial Park Forest City Industrial Park River Road Industrial Park Trafalgar Industrial Park TOTAL Included within the approximate 287 acres of City owned industrial land currently available for sale are 34.3 acres under option in various City owned Industrial Parks. The City serviced land inventory includes only one parcel of industrial land with size greater than 50 acres and this parcel is within the Advanced Manufacturing Innovation Park Phase 4. It is desirable to have more inventory of serviced larger block parcels to provide flexibility, enhanced competitiveness and to ensure there are no lost opportunities for future new light industrial plants looking to locate in London and Southwestern Ontario. Innovation Park (for Map of Park refer to Schedule 1 attached) Innovation Park is located on both the west and east sides of Veteran s Memorial Parkway, north of Highway 401 and south of Hamilton Road. 598 acres of land were acquired between 2001 and 2003 for the development of all four phases of this park. An additional 55 acres were acquired in 2011; 43.5 acres were added to Innovation Park, Phase II, and approximately 12 acres set aside for a future interchange. Phase I was completed in 2005, Phase II in 2008, Phase IV in 2009 and Phase III by the end of Total Gross Acres Total Developable Acres 653 Acres 477 Acres Total Acres Sold: (to date) Acres ** Total Acres Donated to UWO/Fanshawe: Total Acres Optioned (to date) Total Net Acres (Available) Average Selling Price Per Acre 39.7 Acres 30.1 Acres Acres $48,485 per acre # of Parcels Sold: 9 Average Size of Parcel Sold: Types of businesses in the Park 22.3 Acres Light/Advanced Manufacturing ** acres under contract recently sold in April,

5 Skyway Industrial Park (for Map of Park refer to Schedule 2 attached) Skyway Industrial Park is located on the east side of Veteran s Memorial Parkway, north of Oxford Street and south of Huron Street. 172 acres of land were purchased from 1992 to 2000 as part of a co-venture agreement with the London International Airport for the development of an industrial park. Phase I of City land was completed by the end of 2004 and Phase II by the end of Total Gross Acres Total Developable Acres Total Acres Sold: (to date) Total Acres under Contract 172 Acres 130 Acres Acres Acres Total Acres Optioned (to date) Total Net Acres (Available) Average Selling Price Per Acre # of Parcels Sold: 8 Average Size of Parcel Sold: Types of businesses in the Park Forest City Industrial Park 1 Acre Acres $50,579 per acre 9.7 Acres Manufacturing, Warehousing (for Map of Park refer to Schedule 3 attached) Forest City Industrial Park is located the north side of Wilton Grove Road, east of Highbury Avenue, and south of Highway acres of land were acquired in 2001 for the development of a two-phase park. Servicing of Phase I was completed by the end of 2002, and Phase II by the end of Total Gross Acres Total Developable Acres Total Acres Sold: (to date) Total Acres Optioned (to date) Total Net Acres (Available) Average Selling Price Per Acre # of Parcels Sold: 16 Average Size of Parcel Sold: Types of businesses in the Park 178 Acres 134 Acres Acres 3.2 Acres 0 Acres $51,063 per acre 8.2 Acres Manufacturing, Warehousing & Logistics River Road Industrial Park (for Map of Park refer to Schedule 4 attached) River Road Industrial Park is located on the west side of Veteran s Memorial Parkway, north of River Road. 52 acres of land were acquired from 1975 to 2001 for this Industrial park, and development was completed by the end of Total Gross Acres Total Developable Acres Total Acres Sold: (to date) Total Acres Optioned (to date) Total Net Acres (Available) Average Selling Price Per Acre # of Parcels Sold: 10 Average Size of Parcel Sold: Types of businesses in the Park 52 Acres 46.2 Acres Acres 0 Acres Acres $52,406 per acre 3.5 Acres Manufacturing, Warehousing 5.

6 Trafalgar Industrial Park (for Map of Park refer to Schedule 5 attached) Trafalgar Industrial Park is located on the east side of Veteran s Memorial Parkway, north of Gore Road and south of Dundas Street. Approximately 428 acres of raw land were acquired from 1976 to 1984 for this park, and development was phased from 1980 to Total Gross Acres Total Developable Acres Total Acres Sold: (to date) Total Acres Optioned (to date) Total Net Acres (Available) Average Selling Price Per Acre Types of businesses in the Park 428 Acres 379 Acres 344 Acres 0 Acres 12.5 Acres $47,823 per acre Manufacturing, Warehousing UNSERVICED LANDS Current Inventory Unserviced Industrial Land PARK Zoning Inventory (Acres) Huron Industrial Park Light Industrial & General Industrial Inventory (Hectares) Oxford Business Park Light Industrial S/W Corner Highbury & Highway 401 Light Industrial TOTAL Huron Industrial Park (for Map of Park refer to Schedule 6 attached) acres (96.5 ha) of raw land were purchased in 1992 for a future industrial park. This Park is located on the north side of Huron Street west of Crumlin Road opposite the current northerly terminus of Veteran s Memorial Parkway. To date, approximately acres (56.4 ha) is partially serviced and engineering studies are currently underway for stormwater management solutions. Parcels of land within Huron Industrial Park are currently not being offered for sale until the completion of the most appropriate and cost effective engineering studies to determine servicing solutions. Portions of this area are subject to building height restrictions. The Sun Canadian high-pressure oil pipeline runs in a north-south direction though a large portion of the site, and the future Veteran s Memorial Parkway extension dissects the land on the north side of Huron Street. Oxford Business Park Approximately 28.8 acres (11.7 ha) of raw land were purchased by the City of London in This land is located on the north-east corner of Oxford Street and Veteran s Memorial Parkway. To date, this land is partially serviced. Several studies are currently underway to review stormwater management solutions for this parcel, along with a development schedule. S/W Corner Highbury Avenue and Highway 401 Approximately 16.7 acres (6.75 ha) of land were purchased from the Ministry of Transportation in This land is located on the west side of Highbury Avenue, south of Highway 401. At present, approximately 50% of this parcel is designated as a historical forest and zoned Open Space, and approximately 3 acres will be utilized by the Ministry of Transportation for the reconfiguration of the Highbury/Highway 401 interchange. There is approximately 5.35 acres (2.17 ha) remaining that could be developed in the future for light industrial and commercial uses including a hotel and service commercial. 6.

7 FUTURE INDUSTRIAL LANDS Since April of 2013, the City has acquired four parcels of greenfield land to be developed for light industrial land uses. The total lands acquired are acres (81.47 hectares) gross, or 171 acres (69.08 hectares) net developable after servicing. Parcel Total Net Developable (estimated) Acres Hectares Acres Hectares Bradley Ave Wilton Grove Road Wilton Grove Road TOTAL The ILDS team is working on active interests that could change the status of our inventory. Once the outcome of these are known, the team will prepare an Investment Plan to create more shovel ready properties in the short term, and a Land Acquisition Strategy Update for the medium term. SALES ACTIVITY Since 2001, the Realty Services Division has sold approximately acres (182.8 ha) of industrial land for a total of $23,480,398. The estimated municipal tax revenue since 2001 on these land sales totals more than $5,833,600 per year. Based on historical building permit data, the estimated cost to construct these new industrial manufacturing and warehousing establishments was approximately $217,607,390. Acres Sold Land Sales in City-Owned Industrial Parks 2001 to Present Year The above Chart shows the absorption of City industrial land over the past 14 years. Table 2, which is attached to this report, sets out in detail the City owned industrial land sold. In 2015, acres of land were sold for $864,000. Tire Supplier Inc. purchased 3.36 acres of land in River Road Industrial Park for the construction of a 16,200 square foot facility, notably their first London operation. Sodecia Canada Inc. purchased acres of land in Innovation Park to construct a 70,281 square foot highly automated technical centre that utilizes robotic processing and robotic laser assembly systems to supply new build contracts with GM, Chrysler and Ford, including production parts for hybrid vehicles. 7.

8 Employment Creation Since 2001, sales of City owned industrial land have created approximately 3,720 new jobs in City owned industrial parks. EMPLOYMENT CREATION (City-Owned Industrial Parks) # of Employees Year Conclusion While economic growth has been lacklustre, industrial property interest remains steady due to continuing low interest rates. Distribution and logistics inquiries remain strong as these companies strive to improve service and costing to their customers. Industrial inquiries over the past year have been consistently split between: - Large users requiring 20 acres and over for 100,000 to 500,000 sf facilities. - Smaller users requiring 2 to 5 acres for 10,000 to 50,000 sq. ft. buildings within close proximity to Highway Existing small to medium-size owners/users looking at expansion opportunities. Favourable foreign exchange rates spurred hope of an increase in industrial land sales, but there has been a negligible impact on demand so far. Mexico, China and other manufacturing powerhouses remain strong competitors. The current inventory of City owned serviced land is adequate for small to medium sized parcels while there is limited supply of larger block parcels. The recent purchase of greenfield lands to the south of the Forest City Industrial Park may provide short term supply of one large block industrial lands. The City Industrial Land Team works with potential buyers to meet their development timelines in a business-friendly manner. There are numerous other municipalities throughout Southwestern Ontario that monitor industrial land activity in London, making it critical for London to maintain competiveness by being proactive in developing suitable lands that are shovel ready at attractive prices. In addition, to help London compete for industrial employment on an international stage, the goal is to maintain an ample supply of market-ready industrial land that is strategically located to suit the various needs of the target sectors which include: - Advanced manufacturing - Life and Health Sciences - Renewal and Clean Tech - IT and Digital Media - Automotive - Enhanced Transportation/Logistics - Food Processing - Research & Development - Defence and Aerospace 8.

9 Pricing of City of London Municipal industrial Land must remain competitive with surrounding municipalities. As such, staff are recommending pricing remain the same, as in the previous year with the exception of the Trafalgar Park which has limited demand and is of inferior quality to the other parks. A copy of the current policy is attached for Council s information. Acknowledgement This report has been prepared with assistance from Diane Coffin, Industrial Land Officer, Adam Ostrowski, Realty Services, Robert Sutton, Manager Industrial Land Development, John Lucas, Director- Water and Wastewater, Mark Henderson, Director of Business Liaison, and Kapil Lakhotia, London Economic Development Corporation. PREPARED BY: RECOMMENDED BY: BILL WARNER MANAGER OF REALTY SERVICES April 22, 2016 Attach. MARTIN HAYWARD MANAGING DIRECTOR, CORPORATE SERVICES AND CITY TREASURER, CHIEF FINANCIAL OFFICER cc: John Braam, Managing Director, Environmental & Engineering Services & City Engineer John Fleming, Managing Director, Planning and City Planner Mark Henderson, Director of Business Liaison Kapil Lakhotia, President & CEO, London Economic Development Corporation John Lucas, Director, Water and Wastewater David G. Mounteer, Solicitor Robert Sutton, Manager, Industrial Land Development 9.

10 SCHEDULE 1 10.

11 SCHEDULE 1A INNOVATION PARK PHASES I TO IV Revenue and Expense Breakdown as of April, 2016 ACTUAL REVENUE AND PROJECTED REVENUE: Land Sales TOTAL LAND SALES REVENUE TO DATE ( ) $9,731,337 Acreage Sold to Date Acres Average Price Per Acre (based on actual sales to date) $48,485 /ac Estimated Sales Revenue on Balance of Park ( $65,000 per acre plus $15,263,550 (30.1 $56,500 per acre) TOTAL ACTUAL AND ESTIMATED SALES REVENUE $24,994,887 Annual Municipal Taxes On Land Sales to Date ANNUAL MUNICIPAL TAXES (2015 Actual) $1,358,880 Annual Taxes Per Acre (2015 Actual) $8,556 /ac BUDGETED EXPENSES: Budgeted Acquisition, Design & Construction Costs: A) Land Costs: Total Land Acquisition Cost (477 net acres) $12,222,016 B) Servicing Costs: Design & Construction Costs $61,413,987 Less: Estimated Oversizing Component * - $23,867,350 TOTAL LOCAL SERVICES $37,546,637 Net Acreage of City owned Land 477 Acres C) TOTAL COST (A + B) Land plus Local Servicing Cost $49,768,653 Average Expenditures Per Net Acre D) SuperBuild Funding (Provincial) Senior Government Infrastructure Funding MIII Funding (Provincial) E) TOTAL COST (A + B) Land plus Local Servicing cost - Net of Superbuild, MIII & ISF Funding Average Expenditures Per Net Acre (after deducting senior Government Funding) $104,337 /ac - $17,448,457 $32,320,196 $67,757 /ac * It should be noted that Oversizing costs are ultimately borne by the City. Note: Estimates are based on Current Approved Budget Allocation as reported in JD Edwards 11.

12 SCHEDULE 2 12.

13 SCHEDULE 2A SKYWAY INDUSTRIAL PARK Revenue and Expense Breakdown as of April, 2016 ACTUAL REVENUE AND PROJECTED REVENUE: Land Sales TOTAL LAND SALES REVENUE TO DATE $4,403,429 Acreage Sold to Date Acres Average Price Per Acre (based on actual sales to date) $50,579 /ac Estimated Sales Revenue on Balance of Park (24.74 $65,000 per acre plus $2,208,100 (18.1 acres for $600,000) TOTAL ACTUAL AND ESTIMATED SALES REVENUE $6,611,529 Annual Municipal Taxes On Land Sales to Date ANNUAL MUNICIPAL TAXES (2015 Actual) $1,065,422 Annual Taxes Per Acre (2015 Actual) $12,238 /ac BUDGETED EXPENSES: Budgeted Acquisition, Design & Construction Costs: A) Land Costs: Total Land Acquisition Cost (123 net acres) $3,527,517 B) Servicing Costs: Design & Construction Costs $12,425,298 Less: Estimated Oversizing Component * - $2,663,892 TOTAL LOCAL SERVICES $9,761,406 Net Acreage of City owned Land 130 Acres C) TOTAL COST (A + B) Land plus Local Servicing Cost $13,288,923 Average Expenditures Per Net Acre $102,222 /ac D) SuperBuild Funding (Provincial) & ISF Funding (Federal) - $4,531,616 E) TOTAL COST (A + B) Land plus Local Servicing cost - Net of Superbuild & ISF Funding Average Expenditures Per Net Acre (after deducting senior Government Funding) $8,757,307 $67,364/ac * It should be noted that Oversizing costs are ultimately borne by the City. Note: Estimates are based on Current Approved Budget Allocation as reported in JD Edwards 13.

14 SCHEDULE 3 14.

15 SCHEDULE 3A FOREST CITY INDUSTRIAL PARK Revenue and Expense Breakdown as of April, 2016 ACTUAL REVENUE AND PROJECTED REVENUE: Land Sales TOTAL LAND SALES REVENUE TO DATE $6,641,405 Acreage Sold to Date Acres Average Price Per Acre (based on actual sales to date) $51,063 /ac Estimated Sales Revenue on Balance of Park (3.2 $45,000 per acre) $144,000 TOTAL ACTUAL AND ESTIMATED SALES REVENUE $6,785,405 Annual Municipal Taxes On Land Sales to Date ANNUAL MUNICIPAL TAXES (2015 Actual) $1,245,754 Annual Taxes Per Acre (2015 Actual) $9,578 /ac EXPENSES: Budgeted Acquisition, Design & Construction Costs: A) Land Costs: Total Land Acquisition Cost (134 net acres) $5,243,912 B) Servicing Costs: Design & Construction Costs $10,942,326 Less: Estimated Oversizing Component * - $1,355,040 TOTAL LOCAL SERVICES $9,587,286 Net Acreage of City owned Land 134 Acres C) TOTAL COST (A + B) Land plus Local Servicing Cost $14,831,198 Average Expenditures Per Net Acre $110,681 /ac D) SuperBuild Funding (Provincial) - $2,503,501 E) TOTAL COST (A + B) Land plus Local Servicing cost - Net of Superbuild Average Expenditures Per Net Acre (after deducting senior Government Funding) $12,327,697 $91,998 * It should be noted that Oversizing costs are ultimately borne by the City. Note: Estimates are based on Current Approved Budget Allocation as reported in JD Edwards 15.

16 SCHEDULE 4 16.

17 SCHEDULE 4A RIVER ROAD INDUSTRIAL PARK Revenue and Expense Breakdown as of April, 2016 REVENUE ACTUAL AND ESTIMATED: Land Sales TOTAL LAND SALES REVENUE TO DATE $1,842,599 Acreage Sold to Date Acres Average Price Per Acre (based on actual sales to date) $52,406 /ac Estimated Sales Revenue on Balance of Park (2.3 $75,000/acre / 8.47 $65,000/acre) $723,050 TOTAL ACTUAL AND ESTIMATED SALES REVENUE $2,565,649 Annual Municipal Taxes On Land Sales to Date ANNUAL MUNICIPAL TAXES (2015 Actual) $431,404 Annual Taxes Per Acre (2015 Actual) $12,270 /ac EXPENSES: Budgeted Acquisition, Design & Construction Costs: A) Land Costs: Total Land Acquisition Cost (46.2 net acres) $878,011 B) Servicing Costs: Design & Construction Costs $6,208,903 Less: Estimated Oversizing Component * - $2,563,303 TOTAL LOCAL SERVICES $3,645,600 Net Acreage of City owned Land 46.2 Acres C) TOTAL COST (A + B) Land plus Local Servicing Cost $4,523,611 Average Expenditures Per Net Acre $97,914 /ac * It should be noted that Oversizing costs are ultimately borne by the City. Note: Estimates are based on Current Approved Budget Allocation as reported in JD Edwards 17.

18 SCHEDULE 5 18.

19 SCHEDULE 5A TRAFALGAR INDUSTRIAL PARK Revenue and Expense Breakdown as of April, 2016 REVENUE ACTUAL AND ESTIMATED: Land Sales TOTAL LAND SALES REVENUE TO DATE $16,451,192 Acreage Sold to Date 344 Acres Average Price Per Acre (based on actual sales to date) $47,823 /ac Estimated Sales Revenue on Balance of Park (12.5 $65,000/acre) $812,500 TOTAL ACTUAL AND ESTIMATED SALES REVENUE $17,263,692 Annual Municipal Taxes On Land Sales to Date ANNUAL MUNICIPAL TAXES (2015 Actual) $3,666,439 Annual Taxes Per Acre (2015 Actual) $10,658 /ac EXPENSES: Budgeted Acquisition, Design & Construction Costs: A) Land Costs: Total Land Acquisition Cost (428 net acres) $4,408,828 B) Servicing Costs: Design & Construction Costs $9,022,648 TOTAL LAND AND LOCAL SERVICES $13,431,476 Net Acreage of City owned Land 379 Acres Average Expenditures Per Net Acre $35,439 /ac Note: Estimates are based on Current Approved Budget Allocation as reported in JD Edwards 19.

20 TABLE 1 BMA MUNICIPAL STUDY 2015** INDUSTRIAL PARKS Municipality Land Price Total (Per Acre) (Acreage) Cambridge $145, Guelph $275,000 - $475, Niagara Falls $20,000 - $40, Sarnia $50,000 - $70, St. Thomas $35,000 - $45, Stratford $75,000 - $100, Windsor $65,000 - $130,000 9 ** BMA Management Consulting Inc. completes a municipal comparative study annually on behalf of 104 Ontario Municipalities. 20.

21 TABLE 2 LONDON ECONOMIC DEVELOPMENT CORPORATION ECONOMIC ANALYSIS ECONOMIC SPIN OFFS The following analysis on job and tax generation resulting from the City s Industrial Land Development Strategy (ILDS) was prepared by the London Economic Development Commission (LEDC). This analysis has not been reviewed by Finance Staff. Summary table to illustrate return on investment (ROI) on Innovation Park: PANEL A INNOVATION PARK EXPENDITURES INNOVATION PARK: (For Acres Sold from ) COST/BENEFIT PER ACRE (For Acres Sold from ) Gross expenditure on land and local services $ 16.6 million $ 104,337 (Less) Government Grants $ 5.8 million (Superbuild, M-III & ISF) $ 36,580 NET expenditure on land and local services: (A) $ 10.8 million $ 67,757 REVENUES Total Land sales over 10 years $ 8.3 million $ 52,315 Annual Municipal Industrial Taxes (2015) $ 1.4 million $ 8,556 Cumulative Industrial Taxes over 10 years $ 7.8 million $ 49,101 Building Permits over 10 years $ 751,271 $ 4,730 Total Cash Inflow over 10 years: (B) $ 16.9 million $ 106,146 Net Cash Position after 10 years (B A) OTHER SUBSIDIES $ 6.1 million $ 38,388 Development Charge Exemptions (CIP) $ 17.0 million $ 106,847 ECONOMIC BENEFITS (over 10 years) (Provided by LEDC) Employment Created 835 Direct Jobs 5.26 Direct Jobs 418 Indirect Jobs 2.63 Indirect Jobs Income Generated $ 121 million $ 761,820 Municipal Residential Tax from new job creation over 10 years $ 8.7 million $ 54,775 Note: These estimates have been provided by the City of London and LEDC. Additional Notes & Assumptions: The totals and Per Acre amounts for Gross and Net Expenditures above have been pro-rated for lands which have sold to date. Municipal Residential Taxes are defined as the estimated taxes generated from the housing impact of new direct and indirect employment created by the industrial park development. Net Cash Position above is based on lands which have currently sold to date. No expenditures shown for maintenance related costs for the industrial park. Civic Administration multiplier for indirect jobs is 50%. Indirect jobs are defined as employment created through construction, raw material providers, local supply chains, transportation, logistics, maintenance and other spin-off businesses that benefit from the industrial park development. Direct jobs are defined as employment created directly by the companies purchasing land within the industrial park. Information contained herein has not been verified by the Property Tax Department or Finance Department. Net Cash Position will continue to increase over time as industrial park sells out. Return is based on a building coverage ratio of 17 to 23 percent. Lands under contract which sold in April, 2016, are not included in the ROI calculation above. 21.

22 TABLE 3 LONDON ECONOMIC DEVELOPMENT CORPORATION ECONOMIC ANALYSIS ECONOMIC SPIN OFFS The following analysis on job and tax generation resulting from the City s Industrial Land Development Strategy (ILDS) was prepared by London Economic Development Commission (LEDC). This analysis has not been reviewed by Finance Staff. Summary table to illustrate return on investment (ROI) on Forest City Industrial Park: PANEL B FOREST CITY INDUSTRIAL PARK EXPENDITURES FOREST CITY PARK: COST/BENEFIT PER ACRE (FOR ACRES SOLD FROM 2003 to 2015): (FOR ACRES SOLD FROM 2003 to 2015): Gross expenditure on land and local services $ 14.4 million $ 110,681 (Less) Government Grants $ 2.4 million (Superbuild) $ 18,683 NET expenditure on land and local services: (A) $ 12.0 million $ 91,998 REVENUES Total Land sales over 13 years $ 6.6 million (from acres) $ 51,064 Annual Municipal Industrial Taxes (2015) $ 1.2 million $ 9,578 Cumulative Industrial Taxes over 13 years $ 13.0 million $ 100,554 Building Permits over 13 years $ 454,024 $ 3,491 Total Cash Inflow over 13 years: (B) $ 20.2 million $ 155,109 Net Cash Position after 13 years (B A) $ 8.2 million $ 63,111 OTHER SUBSIDIES Development Charge Exemptions (CIP) $ 8.2 million $ 62,857 ECONOMIC BENEFITS (Provided by LEDC) (over 13 years) Employment Created 1,941 direct 971 indirect jobs direct 7.47 indirect jobs Income Generated $ 150 million $ 1.15 million Municipal Residential Tax from new job creation over 13 years $ 9.2 million $ 70,758 Note: These estimates have been provided by the City of London and LEDC. Additional Notes & Assumptions: The totals and per acre amounts for Gross and Net expenditures above have been pro-rated for lands which have sold to date. Approximately 3.2 acres is under option and not included in above calculations. Municipal Residential Taxes are defined as the estimated taxes generated from the housing impact of new direct and indirect employment created by the industrial park development. Net Cash Position above is based on lands which have currently sold to date. No expenditures shown for maintenance related costs for the business park. Civic Administration multiplier for indirect jobs is 50%. Indirect jobs are defined as employment created through construction, raw material providers, local supply chains, transportation, logistics, maintenance and other spin-off businesses that benefit from the industrial park development. Direct jobs are defined as employment created directly by the companies purchasing land within the industrial park. Information contained herein has not been verified by the Property Tax Department or Finance Department. Return is based on a building coverage ratio of 17 to 23 percent. 22.

23 TABLE 4 LONDON ECONOMIC DEVELOPMENT CORPORATION ECONOMIC ANALYSIS ECONOMIC SPIN OFFS The following analysis on job and tax generation resulting from the City s Industrial Land Development Strategy (ILDS) was prepared by the London Economic Development Commission (LEDC). This analysis has not been reviewed by Finance Staff. Summary table to illustrate return on investment (ROI) on Innovation Park: PANEL C SKYWAY INDUSTRIAL PARK EXPENDITURES SKYWAY IND. PARK: (For Acres Sold from ) COST/BENEFIT PER ACRE (For Acres Sold from ) Gross expenditure on land and local services $ 8.9 million $ 102,222 (Less) Government Grants $ 3.0 million (Superbuild) $ 34,859 NET expenditure on land and local services: (A) $ 5.9 million $ 67,364 REVENUES Total Land sales over 9 years $ 4.4 million $ 50,579 Annual Municipal Industrial Taxes (2015) $ 1.1 million $ 12,238 Cumulative Industrial Taxes over 9 years $ 7.0 million $ 80,652 Building Permits over 9 years $500,144 $ 5,745 Total Cash Inflow over 9 years: (B) $ 11.9 million $ 136,976 Net Cash Position after 9 years (B A) OTHER SUBSIDIES $ 6.1 million $ 69,613 Development Charge Exemptions (CIP) $ 14.6 million $ 168,384 ECONOMIC BENEFITS (over 9 years) Employment Created (Provided by LEDC) 1,142 Direct Jobs 571 Indirect Jobs Direct Jobs 6.56 Indirect Jobs Income Generated $ 102 million $ 1.2 million Municipal Residential Tax from new job creation over 9 years $ 7.7 million $ 88,800 Note: These estimates have been provided by the City of London and LEDC. Additional Notes & Assumptions: The totals and per acre amounts for Gross and Net expenditures above have been pro-rated for lands which have sold to date. Approximately 1 acre is under option and not included in above calculations. Municipal Residential Taxes are defined as the estimated taxes generated from the housing impact of new direct and indirect employment created by the industrial park development. Net Cash Position above is based on lands which have currently sold to date. No expenditures shown for maintenance related costs for the business park. Civic Administration multiplier for indirect jobs is 50%. Indirect jobs are defined as employment created through construction, raw material providers, local supply chains, transportation, logistics, maintenance and other spin-off businesses that benefit from the industrial park development. Direct jobs are defined as employment created directly by the companies purchasing land within the industrial park. Information contained herein has not been verified by the Property Tax Department or Finance Department. Return is based on a building coverage ratio of 17 to 23 percent. 23.